My 2 Non-Negotiable RULES OF FINANCE | Dr. Anil Lamba

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In this video, I explain the two non negotiable rules of finance that I have followed throughout my career.

First, every asset must generate a return at least equal to its cost of capital. Second, assets must bring in cash before liabilities demand it.

These two principles apply to individuals, investors, and business owners alike. Ignore them, and financial stress follows. Follow them, and decisions become clear.

#finance #charteredaccountant #financialeducation #business #businessowner #entrepreneur #financeeducation #education

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26 COMMENTS

  1. Well simplified that cash has a cost and therefore Cash itself has to generate higher than the cost of cash within a time frame before the due date of refund, that is before the payback period

  2. In a good company credit and pricing are also decided by the finance department/ manager. If your sales guy is allowed to fix the price of a product without the costing inputs from the finance department or if the sales department fixes the credit terms without the concurrence of the finance department. Obviously the top management doesn't know how to manage the company

  3. Fully agree, financial acumen is one of the important competencies for all managers. An Organisation with all Business and Support function Managers and not just Finance manager who understands the "why" behind the "how much" will be far more resilient.

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